International Finance

Introduction

In our discussion of foreign trade in International Trade, we left out one crucial element: How do buyers and sellers in different countries do business when they all use different currencies? When a giant bluefin tuna is packed in ice and flown from Cape Cod to Tokyo, the fishing boat captain wants to be paid in dollars. But the Japanese fishmonger has nothing but yen. That doesn't help the Cape Cod captain, who has to pay his crew and his bills in dollars. So the Japanese fishmonger must somehow pay for the tuna in dollars.

How are these problems resolved? What determines how many yen a dollar is worth? In other words, how does the foreign exchange system work?

This section answers these questions and explains the foreign exchange markets, balance of payments, International Monetary Fund, and what is meant by a “strong” and “weak” dollar.

book cover

Excerpted from The Complete Idiot's Guide to Economics © 2003 by Tom Gorman. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.

To order this book direct from the publisher, visit the Penguin USA website or call 1-800-253-6476. You can also purchase this book at Amazon.com and Barnes & Noble.

highlights

Top 10 Sweet 16 Birthday Gifts
Your daughter's sweet 16 is a big milestone in her life. Celebrate this special occasion with one of these top gifts for girls turning 16.

Find Today's Newest & Best Children's Books!
Looking for newly released books for your child? Try our new Book Finder tool to search for new books by age, type, and theme, brought to you by Galactic Hot Dogs.

Printable Lists of the Top 100 Baby Names
Need help with baby name ideas? Use our printable list of the top 100 girl names and top 100 boy names of 2015 to help you brainstorm and narrow down your favorites.

Registered for Kindergarten — Now What?
Wondering what to do now that you've signed your child up for kindergarten? Try our award-winning Kindergarten Readiness app! This easy-to-use checklist comes with games and activities to help your child build essential skills for kindergarten. Download the Kindergarten Readiness app today!

stay connected

Sign up for our free email newsletters and receive the latest advice and information on all things parenting.

Enter your email address to sign up or manage your account.

Facebook icon Facebook icon Follow Us on Pinterest

editor’s picks